The Zcash network has transitioned to Ironwood: how a two-year vulnerability involving counterfeit coins was closed.
On July 28, at block №3,428,143 on the Zcash mainnet, the Ironwood update was launched. The key element of the upgrade is the introduction of a new private transaction pool, designed to replace Orchard, in which a critical bug was discovered at the end of May.
Vulnerability Hidden Since 2022
The issue was identified by Shielded Labs security engineer Taylor Hornby during code analysis using Anthropic's AI model Opus 4.8. The bug had existed since the pool's launch in May 2022 and theoretically allowed for the undetected minting of fake ZEC. In the test network, the researcher successfully generated coins using a working attack code.
The team closed the vulnerability in two stages in early June: first with a soft fork that temporarily disabled transactions in Orchard, then with a hard fork that restored functionality. No signs of real exploitation were found. However, the architecture of the private pool does not allow for cryptographic proof of the absence of counterfeit coins — transfer amounts are hidden by design.
How Ironwood Solves the Problem
The update introduces a check at the pool boundary. Orchard has been switched to a restricted mode: new funds cannot enter it, and coins already placed are locked for internal transfers. Withdrawals are only possible through a "turnstile" into Ironwood.
At the protocol level, a mechanism is built in to ensure that no more ZEC is withdrawn from the old vault than was deposited into it. This allows for verifying the integrity of the supply without access to private transaction data. Ironwood operates on the corrected Orchard protocol, has undergone formal verification, and passed a third-party security audit.
What Users Need to Do
The transition is implemented at the wallet level: applications supporting Ironwood will offer to move funds from the old vault. Creating a new wallet or changing addresses is not required — incoming transfers to existing Orchard addresses are automatically redirected to the new pool. In Zodl, migration is already available in manual mode, with an automatic option promised later. Users without assets in Orchard simply need to update their application.
Market Reaction
The launch of the upgrade did not noticeably affect the ZEC exchange rate. The deployment date for Ironwood was known in advance — developers announced it on June 9. Over the past 24 hours, the coin has fallen by 4.3% to $468. As a reminder, after the vulnerability disclosure in early June, the ZEC rate crashed by 48% to $302.48.
Expert opinion: Ironwood is a sound step, but the situation highlights a fundamental problem with private blockchains: hidden data does not allow for completely ruling out hidden issuance. Formal verification is the only path to trust, but it does not guarantee the absence of future bugs. The market, judging by the tepid reaction, has already priced in the risks.